In the near term, the markets will continue to strengthen and weaken with the weather, and crude and product prices will be range-bound.
The bottom line is US demand seems to be recovering, but the market still needs to be convinced of that.
Declines will continue. There is only one new field of any size - the Buzzard field - set to come online. Otherwise it's just bits and pieces.
The UK will eventually have to import.
We're trading on the weather. It's cold in New York, so the price is going up.
It appears increasingly likely that we will need colder-than-normal temperatures in order for heating oil and gas oil to perform this winter and lead crude up.
There is a lot of refinery capacity around Houston. If (Hurricane Rita) goes further south then it could hit refineries around Corpus Christi.
But markets are not really surprised. UK oil production has been declining for several years.
The market doesn't need more sour crude now, it needs more oil products. For anyone who has been paying close attention to oil markets in recent months, the whole thing is a big shrug of the shoulders.
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